I've been reading posts for many months now where people have struggled with the restrictions around providing UK buy-to-let mortgages to UK expats in Australia. Largely the difficulties arise because the mortgage provider is required to be regulated both in the UK and Australia, meaning they need a presence in both countries. This significantly limits the size of the market. Prices for these products quoted to me by brokers have been much higher than equivalent products provided to UK residents. Further the broker fees have been in the thousands, not hundreds. This might be a familiar story for some of you, or at least it will become thus in the not too distant future.
The good news is that I've just had a really positive experience on this front. After speaking to many brokers and being provided with higher level interest rates and exorbitant broker fees, i was able to find a solution that was equivalent to what i would pay and receive in UK. I've just completed on the mortgage. The answer was that I engaged directly with HSBC UK. The only difficulty was the fact that I had to do it all myself without a broker. On the flip side it gave me access to exactly the same products UK residents receive. In doing so i'm saving a lot of money and have been able to secure a long term fixed rate mortgage so I can carry on out here in Australia and not have to deal with this headache again for quite some time.
To the details. HSBC offer 2 avenues for mortgages to Ex pats in Australia:
The first route is via an Ex Pat mortgage through HSBC Expat. This one was prohibitive for us as it requires a certain amount of capital (i believe it was £60k+, maybe more) to set up an HSBC offshore expat account. This might be appropriate for someone with money sat around.
The second route is via a regular buy-to-let mortgage route. The website link is here: https://www.hsbc.co.uk/1/2/mortgages/buy-to-let-mortgages
Please note the eligibility criteria. Critically you need to have lived in the house at some point since you bought it for at least 6 months - so this mortgage doesn't suit you if you are an overseas landlord looking to buy an investment buy-to-let. Also when we applied as an overseas landlord the minimum annual salary requirement (single or joint, depending on the application), was £75k - although i cannot find the requirement on their website anymore so perhaps things have changed since we started the process in January. They also say that the rent must be 145% of the mortgage repayments. I'm not sure whether this has changed since we started our application but they were only looking for 145% of the interest portion of our capital repayment mortgage when we applied.
The whole process took about 8 weeks from start to finish and it was painful because of the speed of mail and general lack of competence of some of HSBC staff. Note that we had to get some documents notarised here in Australia which cost about $150. The only document that we actually had to send by post was the signed mortgage deed. Everything else we were able to scan and send. We had our managing agent for the UK property issue the current tenancy agreement directly to the conveyancing company which was acceptable.
This was a welcome relief to us, we are able to save at least £200 a month on what the brokers were quoting with this HSBC product, which over the long term is a really meaningful saving.
I'd be more than happy to answer any questions or provide additional feedback on the process if anyone's interested.
The Ozzie Pom